In arbitration proceedings in India, costs are determined based on several factors, including the complexity of the case, the duration of proceedings, the number of hearings, and the fees of the arbitrators and legal representatives involved. Here’s a detailed overview of how costs are typically determined in arbitration proceedings in India: Determining Costs in Arbitration Arbitrator’s Fees: Hourly Rates or Lump Sum: Arbitrators usually charge fees either on an hourly basis or a lump sum for the entire arbitration process. The fees are determined based on the seniority, expertise, and reputation of the arbitrator. Cost Schedule: Many institutions and individual arbitrators have a schedule of costs that outline the fees for different stages of arbitration, including preliminary meetings, hearings, and issuing the award. Administrative Costs: Institutional Arbitration: If the arbitration is administered by an arbitral institution like the ICC (International Chamber of Commerce) or SIAC (Singapore International Arbitration Centre), administrative fees charged by the institution are considered. Registry Fees: Courts or arbitral institutions may charge registry fees for filing and processing arbitration documents. Legal and Expert Fees: Legal Representation: Each party bears the cost of their own legal representation, including fees for lawyers, paralegals, and legal advisors. Expert Witnesses: Costs related to expert witnesses, if any, who provide testimony or opinions on specific matters in the arbitration. Other Expenses: Venue Costs: Charges for renting arbitration venues or meeting rooms, if applicable. Travel and Accommodation: Expenses related to travel and accommodation for arbitrators, witnesses, and parties attending hearings. Tax and Other Levies: GST (Goods and Services Tax): Applicable taxes such as GST may be included in the total costs. Court Fees: If any court involvement is necessary for enforcement or any other reasons, court fees may apply. Principles Guiding Costs Determination Reasonableness and Proportionality: Costs should be reasonable and proportionate to the dispute’s complexity, the amount in dispute, and the efforts expended by the parties and arbitrators. Arbitrators typically aim to minimize costs while ensuring a fair and efficient arbitration process. Costs Allocation: General Rule: In the absence of specific agreements between parties, costs are usually allocated by the arbitral tribunal in the final award. Costs Follow the Event: The party that prevails on substantial issues may be awarded costs by the tribunal, including arbitration fees and legal expenses. Costs Management: Parties are encouraged to manage costs effectively by engaging in efficient arbitration proceedings, avoiding unnecessary delays, and cooperating with each other and the arbitrators. Conclusion In conclusion, costs in arbitration proceedings in India are determined based on various factors, including arbitrator fees, administrative costs, legal and expert fees, and other expenses incurred during the arbitration process. Parties should discuss and agree on cost implications at the outset of arbitration or refer to institutional rules that provide guidelines on cost allocation. Effective management of costs ensures transparency and fairness in the arbitration process, contributing to the overall efficiency and satisfaction of all parties involved.

Dear client, The costs in arbitration proceedings are governed by the section 31A of the Arbitration and Conciliation Act, 1996. Costs includes arbitrator’s fees, administrative expenses, legal fees and any other expenses incurred during the arbitration process. Types of costs in arbitration process: • Tribunal fees and expenses • Legal fees of parties • Cost related to expert witnesses • Institutional fees (if applicable) • Travel and accommodation expenses of arbitrators and witnesses Principles of costs following the event: • The losing party is generally ordered to pay the costs unless the tribunal decides otherwise. This principle ensures that a party who initiates an unsuccessful claim does not burden the successful party with expenses. Allocation of costs • Arbitrators have the discretion to allocate costs based on factors like that conduct of parties, frivolous claims, and unnecessary prolongation of proceedings this is based on the facts of the different case. • If a party engages in unnecessary delays or procedural misconduct, the tribunal may penalize them with higher costs. Advance on costs: • In institutional arbitration, parties may be required to deposit an advance on costs to cover initial expenses, failure to deposit may result in suspension or termination of proceedings. Security for costs: • In some cases, arbitrators may order party to provide security for costs to ensure the other party does not suffer financial loss due to prolonged proceedings. Taxation of costs: • The tribunal’s cost determination is usually final unless and until challenged in court. However, courts can review cost awards if they are found to be excessive or unreasonable. I hope this answer helps, in case of future queries please feel free to contact us. Thank you